World stocks near 9-month high on upbeat earnings

By IBT Staff Reporter On 07/23/09 AT 5:00 AM

World stocks rose close to the previous session's nine-month high and oil edged up on Thursday as forecast-beating earnings from major firms raised expectations for a global economic recovery. Swiss bank Credit Suisse's higher-than-expected second-quarter profits and drugmaker Roche's bullish two-year forecast followed solid reports in the United States from Apple and Starbucks on Wednesday.

With every positive trading session, confidence levels return day by day, with optimistic rhetoric being heard from all angles, said Owen Ireland, analyst at ODL Securities.

MSCI world equity index rose a quarter percent, inching closer to Wednesday's peak, which was highest level since mid-October.

The FTSEurofirst 300 index gained 0.2 percent, with banks among the top gainers. The index has risen for nine consecutive days -- the longest winning streak since late 2006.

Emerging stocks were up 0.9 percent.

According to Thomson Reuters data, firms on the S&P 500 index are expected to see their earnings contract by 31.7 percent in the second quarter. The contraction rate is expected to ease to 21.0 percent for the third quarter before swinging back to growth in the final three months of the year.

U.S. crude oil rose 0.1 percent to $65.42 a barrel.

The September bund future fell 32 ticks as firm equities encouraged outflows from safe-haven government bonds.

YEN UNDER PRESSURE

The low-yielding yen was under pressure with investors watching for yen selling related to launches this week of Japanese investment trusts which will invest in overseas assets and foreign currencies.

The dollar rose 0.7 percent to 94.25 yen. It was steady against a basket of major currencies just off the previous day's seven-week low.

The overall bias is toward risk-seeking, as the stock markets have shown a strong run-up and the (Federal Reserve) has clearly stated it will continue its easy policy, which was a relief for the market, said Tsutomu Soma, senior manager of foreign securities at Okasan Securities in Tokyo.